The logistics process all seems very straightforward. And maybe it really is. People sit in front of a screen and order what they want. All that’s left to do is for someone to send a package with the right items. Done.
But if you take a look at what’s going on behind the scenes, you’ll see that there’s actually a lot more to it than that.
To ensure you operate efficiently when launching your online store, we’ll briefly outline the key elements of a streamlined order fulfillment process below.
Inbound
The logistics process begins with “inbound.” That’s when your supplier or manufacturer delivers the products to you.
If anything goes wrong here, it disrupts the rest of the supply chain. That’s why it’s important to thoroughly check all incoming shipments for both quality and quantity. After all, you don’t want to just assume that everything is correct and blindly place all products on the warehouse shelves. No.
Because if your customer is counting on spending this coming weekend on the beach in her new bikini, but on Friday she receives the wrong size (due to incorrect labeling) or nothing at all (due to incorrect stock levels), she probably won’t be very happy about it.
And if you don't go out of your way to make it up to her in some way, there's a good chance she'll order from a different online store next time.
Effective inventory management therefore starts with the inbound process. Another important point here is that you should “train” your manufacturers or suppliers to deliver goods in as organized a manner as possible.
It takes less time (and therefore costs less) to unload a pallet with neatly labeled and sorted products than one where everything is jumbled together without labels.
Going back to the example of the woman who ordered her bikini, you can see that it basically comes down to knowing exactly how long it takes to replenish your stock levels.
When your customer sees the message “out of stock” while holding their card reader, they’ll likely head to a competitor’s site and complete their order there.
Effective inventory management takes place between the receipt of goods (inbound) and their actual shipment to your end customer (outbound).
Efficient warehousing
A business is really nothing more than a collection of systems, processes, and procedures. If you run an online store, one of the most important systems is the one you use to manage your inventory.
A good inventory management system ensures that:
- Fast-moving products should be stored in an ideal warehouse location. You don’t want goods that are frequently ordered and shipped to be tucked away at the back of your warehouse on the top shelf. Instead, they should be kept close to the packing table.
- You’ll be notified in time when stock levels for a particular product are running low. This is important because it alerts you when you need to restock from your supplier or manufacturer—so you don’t lose customers to the competition.
- Products with a limited shelf life are managed according to the FIFO, FEFO*, or another principle.
(*FEFO: First Expired, First Out. For food products, it may be the case that certain items received later in the warehouse still need to be shipped first because their expiration date is closer to today.)
Outbound
After inbound processing and efficient inventory management, proper order fulfillment is crucial. The outbound process begins when a customer places an order in your online store.
From that point on, it’s important that the order is processed quickly and accurately. The order must contain the correct products. Because if returns occur due to an error in the picking process, you can probably kiss your profit margin for that order (at least partially) goodbye.
In addition, you need to pay close attention to how everything is packaged. Not only do you need to choose the right shipping box (to avoid waste and excessive shipping costs), but you also need to consider the best way to fill the boxes. This is important if you want your products to arrive at your customer in perfect condition.
The Last Mile
For the “last mile,” you can partner with various couriers, such as DPD, PostNL, Bpost, GLS, TNT, UPS, and others.
Each of these couriers has its own features and pricing options. Prices vary depending on the services you require. (These include time-slot deliveries, evening deliveries, deliveries with or without a signature upon receipt, shipments to destinations outside the EU, etc.)
Tip: Offer multiple shipping options in your online store. We firmly believe that giving customers the ability to choose who delivers their order, where, and when adds significant value. Your logistics process should therefore be tailored to accommodate this.
For example, customers today want to be delivered by GLS if they’re home during the day. If they want an evening delivery, they might be more likely to choose PostNL, and if they’d rather pick up their package at the post office, they’ll choose Bpost.
Conclusion
If you want to provide your customers with reliability and low error rates, you should invest in advanced, automated warehousing systems. This is the only way to grow your online business sustainably—through efficient e-fulfillment.
Are you looking for a partner to help you manage your logistics process?